Housing Starts: Even If You Build It, They Might Not Come

When we talk about the "multiplier effect" housing has on the economy, we're talking about the construction of the house; the sale of a new home; spending on decorating, furnishing, electronics, floor and wall coverings; and other dollars that go into new home construction. This is where we need to be careful to understand the difference between housing starts and new home sales — just because a house is built doesn't guarantee it will be sold. For the multiplier effect to have its greatest bang, that started and eventually completed single-family home has to be sold.